Jamie Menges, CFP, CPA. Index Fund Advisor. Minimum Account Size: $500,000. Minimum Annual Fee: 1% of assets; negotiable for larger accounts.
Jamie, please tell us a little about yourself professionally, including your qualifications.
I am a graduate of Miami University in Oxford, OH with a Bachelor of Science in Business, specializing in Accounting and Finance. Upon completion of my degree, I spent a year with Crowe Horwath, a large regional accounting firm in their Columbus, OH office. Very quickly I realized that I wanted to be involved with my clients on a more personal level. Working in their retirement plan group, I noticed that so many people were in their late 50s and early 60s and had very little saved for retirement. I made the decision to join Principal Financial Group and thought I could make an impact by working with retirement plan participants through an enhanced education program for them. It did not take long to realize that retirement plans were often handled by the business owner’s friend, and that relationship would not be cracked, regardless of the lack of existing participant services.
Still determined to help people properly plan for retirement, I shifted my focus to growing relationships with individuals and families. In 2005, I made the commitment to self-study and complete the 4 sections of the CFP® designation, and sit for the two-day CFP® Exam. Proudly, I completed this journey in only 15 months. It helps to have a supportive wife. Realizing that in order to deliver best in class service to my clients, I needed to operate from a position of greater independence. Therefore, I left Principal Financial Group and joined a private investment management firm in Dublin, OH. I spent five years at Investment Partners, where I came to the realization that the best way for me to serve my clients from a planning perspective while still giving them the best investment options was to design and implement passive portfolio management. As the industry continued to evolve, and recognition of the CFP® designation gained greater notoriety, I decided I wanted to set myself apart by taking the rigorous 4-part Certified Public Accountant exam. In 2010, while the President of the Financial Planning Association of Central Ohio, and father to my one year old son, I self-studied and completed all 4 parts on the first attempt, allowing me to become a CPA in the fall of 2010.
Fast forward to the fall of 2012, I was approached with a professional opportunity I could not pass up. PDS Planning, a fee-only Registered Investment Advisory firm located in Columbus asked me to consider joining their group as a lead advisor and to lead their business development efforts. Additionally, we agreed that on January 1, 2014 I would become one of the four owners of the company. Anytime you need to move clients from one firm to another, it is a daunting task. This time was no different, but it was humbling to watch every client I asked to join me at the new firm comply and move their accounts to our preferred custodian, Charles Schwab
Please tell us something about you as a person.
My wife also is a Miami University graduate, same business school, same accounting degree. About a month before we were to graduate, I summoned the courage to ask her out after a shared accounting class we had. Fortunately, she said yes. We married in 2002 and thirteen years later, she has given me two beautiful children. Our son Evan was born in 2009 and our daughter Caitlyn joined us in late 2011.
I’m beyond fortunate. As Warren Buffett likes to say, “I won the DNA lottery.” I was raised in loving household that my mom and dad created for my sister and myself. I only wanted for material things that I did not need. My parents attended every single sporting event and extra-curricular event that my sister and I participated in. I watched my dad work hard in the insurance sales business and he was never willing to let work get in the way of being in our lives. That was not a rule for him. Rules can be broken. It was a guiding principle.
My second family, more commonly referred to as my in-laws, are equally wonderful people. From day one, they have treated me like a son. I’ve learned countless business lessons from my father-in-law who has built from scratch a very successful custom home building business. In doing that, he has had to make numerous sacrifices with his time. His ability to balance that has been a challenge to say the least.
That brings me to my biggest challenge in life. I answer to two great role models, my father and my father-in-law. Every day I juggle being the dad who is at every event, and the dad who is helping to run a successful business. I want to live up to both of their standards. The bar is set very high, but it’s a challenge I relish.
Introduction to PDS Planning, Inc.
In 1985, a group of financial experts came together and rallied around a simple idea: To help people eliminate the stress usually associated with planning for their financial future.
We wanted to make things less complicated. More approachable. More understandable. More relevant.
We knew that if we could help people understand things better, they could make better decisions.
And if they made better decisions, they could feel more comfortable.
And if they felt more comfortable, they could move more confidently toward achieving their goals.
It’s a pretty simple idea, really. And it’s the idea that has guided us at PDS Planning, Inc. from the very beginning.
Today, PDS Planning is an independently owned, Registered Investment Advisory firm with clients in 24 states.
We are not affiliated with any broker, bank, accounting firm, law firm or insurance company. We are accountable only to our clients and have only their best interests at heart, fully embracing the concept of fiduciary responsibility.
As a result, we have built solid, long-lasting relationships, a number of which have lasted for multiple generations. We are consistently ranked among the top fee-only financial planning firms in central Ohio*. And we’re recognized as one of the top independent fee- only wealth management firms in the country**.
Our promise to our clients: To make the process of planning and acquiring life’s riches as rewarding as attaining them.
*Columbus Business First, November 2014
** Financial Advisor Magazine, July 2015
Minimum Account Size in order for a person to become a client (per our ADV) – like most firms, there is some flexibility in this issue depending on circumstances
The minimum client household investment advisory account size is generally $500,000 of assets under management. This minimum account size may be waived by PDS Planning. Minimum annual retainer fees are $5,000, but PDS may reduce or waive this minimum.
Why do you only build portfolios of low cost index funds or ETFs for your clients?
I believe that low-cost, tax-efficient, broad based index securities are the best way to create a globally diversified portfolio to meet a client’s objectives. Academic research from Vanguard, Standard & Poor’s, and DFA funds consistently show that active managers underperform their respective benchmarks, and once survivorship bias and taxes are accounted for, this gap is sometimes great. Without question, there will be managers who beat their respective benchmark next year, and over the next 10 years. Research suggests that roughly 20-25% of managers will accomplish that feat. However, there has been no evidence to ever suggest that data tells us who those managers will be. In the absence of that informational advantage, I have no way of predicting who those managers will be. Furthermore, research shows that the returns of the majority of active managers are clustered around the mean (average) return of the benchmark. That tells me that there is little chance that the manager we select will not only outperform, but that they will outperform by enough to warrant the risk that they could fall short of the benchmark. It’s a simple risk/reward conversation. Taking that one step further, Standard & Poor’s has done an excellent job with their SPIVA Consistency Scorecard to show us that repeating that performance is extremely difficult.
Could you give us an idea of the services you offer, as well as your charges? If they differ based on circumstances, could you give us a few examples?
Our clients typically fall into one of two categories: Asset Management or Comprehensive Planning
These clients need us to manage a portfolio of assets for them. We have discretionary authorization to make investment decisions on their behalf. This includes all portfolios they ask us to manage, regardless of the custodian of the assets.
COMPREHENSIVE FINANCIAL PLANNING:
For a fixed fee, we provide portfolio management on all client investment accounts and also deliver comprehensive financial planning in all aspects for clients. Our fee is determined by the amount of assets we manage, the client’s balance sheet, and client income. These factors have been an accurate gauge of the complexity of our client’s financial plans. We believe the fixed nature of this fee eliminates any potential conflict of interest. If an opportunity would require us to sell investment portfolio assets to purchase another asset or reduce debt, our fee is not affected.
Additional details are included with our Form ADV, Parts 2A and 2B
Contact details for our firm PDS Planning, Inc.